The Retirement Reality

Today, older Americans face a great deal of uncertainty as they move through their retirement. With rising healthcare costs, a volatile stock market and ongoing mortgage and credit debt, it’s not surprising that 87% of Baby Boomers are not very confident that they will retire in a comfortable lifestyle. Many are afraid that their savings accounts, investment portfolios and government benefits will not provide enough money to sustain their changing needs and financial obligations as they age.

If you are like most people, retirement planning generally relies on assets such as: 401(k)s, IRAs, traditional pensions, Social Security benefits, as well as regular taxable savings and investment accounts. But as a homeowner, you have another, often overlooked, retirement planning asset: Home Equity. U.S. homeowners age 62+ have more than $7 trillion in home equity, making it the largest asset for most households entering retirement. For the average retiring couple, home equity makes up 70% of their net worth—with other assets like IRAs, savings and personal property only making up 30%. With such a large proportion of personal wealth tied up in one’s home, it’s time to rethink how home equity can be used as another tool in your financial arsenal.

New Ways to Access Home Equity

Over the last 30 years, reverse mortgages have gained acceptance as part of strategic retirement planning. In fact, a growing number of respected retirement researchers, such as Harold Evensky, Dr. John Salter, Dr. Wade Pfau, and the Center for Retirement Research at Boston College have all conducted numerous studies to evaluate the pros and cons of reverse mortgages for the benefit of consumers. They have concluded that the reverse mortgage is an important option, with multiple uses that can often help consumers be better financially prepared in retirement, and avoid outliving their money.

1Source: Campbell, Todd. “9 Baby Boomer Retirement Facts That Will Knock Your Socks Off.” The Motley Fool, 19 Mar. 2016,
2Source: U.S. Census Bureau.
3Source: Go Banking Rates. (2018) “The No. 1 Cause of Financial Stress in Every State.”
4Source: Sandra Timmermann, “Shocks and Loss in Retirement: Preventing Despair, Promoting Resilience,” Journal of Financial Service Professionals 70, No. 5 (2016).
5Source: Susan Hoover, “Long-Term Care Insurance (LTCI): The Good, the Bad, and the Ugly,” Enterprising Investor blog, CFA Institute, September 19, 2016.
6Source: National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI).
7Sass, Steven A., “Is Home Equity an Underutilized Retirement Asset?”, Center for Retirement Research at Boston College, Number 17-6, March 2017
8US Census Bureau, “Wealth, Asset Ownership & Debt of Households Detailed Tables: 2015”
9Salter, John., Evensky, Harold., & Pfeiffer, Shaun. (Aug 2012). Standby Reverse Mortgages: A Risk Management Tool for Retirement Distributions. Journal of Financial Planning,
pg. 40. | Pfau, Wade. D. (2016) Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement. Retirement Researcher Media.